Sensex sheds 250 pts, Nifty breaks 8300; banks, oil drag

10:30am Havells under pressure

Shares of Havells India slipped as much as 6.66 percent intraday after brokerage UBS downgraded the stock to sell from neutral, citing rich valuations and elusive growth recovery.

The brokerage cut FY15 revenue growth guidance to around 12-14 percent from 17-20 percent earlier on weaker than expected demand recovery, after having a meeting with the company's management for getting business outlook.

The key message from the meet was a clear disconnect between growth expectations on the street and actual on-the-ground improvement, says the report.

The cut in FY15 revenue growth guidance implies likely growth moderation in 2HFY15 (October-March), says UBS, adding Sylvania 2H performance is also likely to be impacted by higher pension liabilities and forex volatility in Latin America.

10:15am FII View

Gautam Chhaochharia, UBS says Indian financials is its most preferred sector as declining interest rates should support asset quality and earnings. “Top picks on this theme are LIC Housing Finance, Shriram Transport, SBI and IndusInd Bank,” he adds.

“Our Nifty target for 2015-end is 9,600. Our other most preferred stocks are Asian Paints, Bharti Airtel, HDFC Bank, ICICI Bank, Maruti, MCX, ONGC and Reliance Industries. Our least preferred stocks are Bajaj Auto, Cipla, Hero Motocorp, HUL, Infosys, Jubilant Foodworks and United Spirits,” says Chhaochharia.

10:00am Market Check

Equity benchmarks fell nearly a percent in morning trade following downtrend in Asian equities. The 30-share BSE Sensex dropped 266.23 points to 27564.87 and the 50-share NSE Nifty slipped 76.75 points to 8278.90 weighed by banks, oil, auto, capital goods and metals stocks.

The broader markets too were under pressure, falling nearly a percent. About 571 shares have advanced, 1225 shares declined, and 53 shares are unchanged on the Bombay Stock Exchange.

Shares of Infosys, ICICI Bank, Larsen & Toubro, Tata Motors, State Bank of India, ONGC, Axis Bank, Dr Reddy's Labs, Gail India, Sesa Sterlite and NTPC lost 1-2.5 percent. Index heavyweights Reliance Industries and ITC declined over 0.5 percent.

However, HDFC, Sun Pharma, Mahindra & Mahindra, Hindustan Unilever and Bharti Airtel bucked the trend, up 0.2-0.5 percent.

Major Asian stocks like Hang Seng, Nikkei and Seoul Composite dropped more than a percent followed by Shanghai with 0.6 percent loss that was up in morning trade.